Community Health up marginally as health bill stalls; Concordia, Avaya dip several points; iHeart quiet

By Colin Hanner

Chicago, March 23 – Activity in the distressed market was extremely quiet due to the fate of a proposed health care bill in Washington, a trader said, a feeling shared throughout other markets.

“The market in general was quiet, because everyone was waiting to see what was going to happen to the health care bill, which isn’t happening,” a trader said, adding that new issues from BWAY Holding Co. and continued trading from Frontier Communications Corp. stole the thunder of any moves the distressed arena.

That proved to be a sigh of relief for hospital groups, which are threatened under the new bill, though movement was not illustrious in the distressed market for Franklin, Tenn.-based Community Health Systems, Inc., which barely pivoted on the day.

In a similar sphere, pharmaceutical company Concordia International Corp. was down across several issues. Fellow pharmaceutical giant Valeant Pharmaceuticals International Inc. remained nearly unchanged. Elsewhere, Santa Clara, Calif.-based telecommunications company Avaya Inc. saw a several-point downturn in one of its issues, though there was no imminent or current news to explain the fall.

Speculation persisted in the oil sector on continuing worries that the Organization of Petroleum Exporting Countries’ cuts are not doing as much as intended to a burgeoning worldwide glut. California Resources Corp. was unchanged on the day.

iHeartCommunications, Inc. was quieter than usual, a trader said, with one issue remaining virtually unchanged on the day, and Intelsat Jackson Holdings SA was up fractionally on the session.

Community Health quiet

Seeing only a few trades on the session, Community Health’s 6 7/8% notes due 2022 were up ¼ point to 83¾, a trader said.

Its stock was up 30 cents, or 3.57%, to $8.70.

The health care bill in question, the American Health Care Act, was intended to be put to a vote before the House on Thursday, but that was postponed, according to several media outlets. Several reports say there were not enough votes gathered to reach a “yes” consensus and the vote will be moved to Friday.

Hospital groups are under pressure from the proposed bill, which would affect patients who are currently covered under the Affordable Care Act, commonly known as Obamacare. Closures, staff reductions and service cuts are all on the table for hospitals if the proposed bill were to pass.

Pharma mixed

For the first session in many, Valeant Pharmaceuticals was not active following finalized transactions intended to reduce impending debt maturities.

Its 7½% notes due 2021 were up ½ point to just below an 86 handle, a trader said.

And Oakville, Ont.-based Concordia International, which one trader called “close to worthless” on Monday, continued to falter, a trader said.

The 7% notes due 2023 were down as low as 21, a trader said, near a 1-point loss on the session.

The 9% notes due 2022 were down “over 1 point” to a 69½-70 zip code.

Since Concordia announced its fourth quarter results last Wednesday, the 7% notes have dropped 5 points, while the 9% notes have tanked nearly 8 points.

Avaya’s steep loss

Though there was no apparent catalyst for the move, Avaya’s 10½% notes due 2021 were quoted at a 15 bid on Thursday, a trader said.

He said the last print for the issues was 22, reflecting a 7-point loss.

E&P mix

Any indication of prolonged cuts for OPEC and non-OPEC members alike will be under scrutiny over the weekend as officials are set to meet to discuss the deal that has been in play since the beginning of the year, though on Thursday, oil prices continue to depress amid speculation.

In the distressed sphere, California Resources’ 8% notes due 2022 were unchanged at a “78-ish” handle, a trader said.

And Plano, Tex.-based oil and natural gas exploration and production company Denbury Resources Inc.’s 6 3/8% notes due 2021 were down 1 point to 81¾, a market source said.

Distressed roundoff

Not unlike other issues in the distressed market, iHeartCommunications was on the quiet side, particularly the 9% notes due 2022, which were unchanged at 75 on one trade, a market source said.

And Intelsat Jackson Holdings SA’s 7¼% notes due 2020 were up ½ point to 91½.

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